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U.S. stocks rise, eyes on ISM report; Dow Jones up 0.61%

Published 02/05/2013, 09:44 AM
Updated 02/05/2013, 09:45 AM
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Investing.com - U.S. stocks opened higher on Tuesday, as markets eyed the release of U.S. service sector activity data, while strong euro zone economic reports fueled fresh hopes for progress in tackling the bloc's debt crisis.

During early U.S. trade, the Dow Jones Industrial Average climbed 0.61%, the S&P 500 index advanced 0.62%, while the Nasdaq Composite index gained 0.49%.

Sentiment strengthened after a report showed that the Markit services purchasing managers’ index for the euro zone improved to a 10-month high of 48.6 in January from a final reading of 47.2 the previous month and above the preliminary reading of 48.3.

The data offset concerns over political tensions in Spain and Italy which pushed peripheral borrowing costs higher on Monday.

IBM rose 0.11% after saying it is aiming to take on competitors such as Oracle and Hewlett Packard by offering a more affordable Power Systems server and storage product range later this month.

Also in the tech sector, Dell was reportedly taken private in a USD24.4 billion buyout deal by a consortium led by founder Michael Dell, ending the computer maker's 25-year history as a publicly traded firm.

Shares were temporarily halted following the announcement.

Social media giant Facebook added to gains, jumping 1.04%, amid reports it is developing a smartphone application that will track the location of users.

Elsewhere, financial stocks were broadly higher, as Goldman Sachs climbed 0.60% Citigroup advanced 0.80%, while JP Morgan and Bank of America rallied 1.05% and 1.13% respectively.

Separately, Bloomberg reported earlier that Wells Fargo, up 0.60%, is planning to target Persian Gulf sovereign wealth funds to expand its client base in the Middle East.

Among earnings, Kellogg surged 1.79% after the cereal maker reported a narrower-than-expected quarterly loss, thanks to improvements in Latin America.

On the downside, Yum! Brands tumbled 5.76% after beating earnings forecasts for the fourth quarter, but saying same-store sales in its China division fell 6% and it now expects to post a mid-single digit earnings decline for 2013 from the prior year.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 jumped 1.21%, France’s CAC 40 rallied 1.21%, Germany's DAX climbed 0.40%, while Britain's FTSE 100 advanced 0.60%.

During the Asian trading session, Hong Kong's Hang Seng Index tumbled 2.27%, while Japan’s Nikkei 225 Index plummeted 1.9%.

Later in the day, the U.S. Institute of Supply Management was to publish a report on service sector activity.


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